North Korea has been useful to China. They were like a leashed dog. "Gosh, it's a pity about all those trade sanctions you want to put on us. On a completely unrelated note, our buddy North Korea wants to build some nukes. We could probably get them to stop, but..." It's worked for them in the past. Unfortunately, North Korea has just shown that they won't listen to China anymore.
This presents a problem for China. They don't want to let the US in, because then they'd have even more US influence in the region. They don't want North Korea to actually go to war, because that would ruffle all sorts of diplomatic feathers on all sides, and disrupt trade. And they don't want to invade North Korea for themselves, because it's going to be goddamned expensive to fix up that mess.
It'll be interesting to see what China ultimately does. They pretty much hold the fate of North Korea in their hands now.
I think in the event of outright war between NATO (read: everyone else) and North Korea, China would either stay neutral (or give minimal secret assistance to NK) or outright work with everyone else. It would be extremely bad for their continued existence to support North Korea if they attacked anyone, especially the United States, and they know that. North Korea is one of those countries that literally everyone, even minor South American states, really wouldn't mind seeing go away. If China supports the country that's basically Blofeld made into a country, it would be tantamount to getting the entire world against them. And they can't afford that.
Neither can the rest of the planet, really; everyone is co-dependent in their relationships with China. But if a nuke gets launched or South Korea gets invaded, it's going to be a no-holds-barred beatdown and China WILL get caught in the crossfire if they try to support the bad guys.
Oh, I agree. If North Korea starts shit, China will absolutely let them twist in the wind. It's just that none of their options right now are particularly good.
China could simply march in and take over. In some ways, this is the simplest solution. But like I said, that's going to be
expensive, not to mention dealing with the brainwashed populace hiding in a stupidly vast series of bunkers and shelters. It also looks bad to some of China's other allies. Sure, it's justified, but it still makes them kind of nervous.
They could step aside and let South Korea, the US, and various allies handle it. But that would likely lead to a unified Korea. They don't want that, unless it was the North in control. That gives us more power in the region. And again, it makes it look like they don't care for their allies.
Now, they could wait to see if North Korea is going to back down or initiate hostilities. This avoids the issue of alarming their other allies. However, it doesn't look like Kim Jong-un has any intention of backing down, and actually letting the North Koreans try their hands at nuclear hot potato has all sorts of ways it could fuck things up for the Chinese. And it goes back to the initial choice: Do they rebuild North Korea, or do we?
So yeah, China's probably giving a good long think to how they want to handle this. And ultimately, I think it's going to be their decision. We're unlikely to move in until North Korea actually does something stupid if China doesn't give us at least tacit approval, because nobody really wants a Sino-American War going on. It's going to be interesting how it all plays out.